Apple, Beatles Label Plan Announcement

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Apple, Beatles Label Plan Announcement
Last Edited: Sunday, 01 Apr 2007, 6:44 PM EDT
Created: Sunday, 01 Apr 2007, 6:44 PM EDT
Apple CEO Steve Jobs plays a Beatles song on iTunes as he introduces the iPhone at the MacWorld in San Francisco in this Jan. 9, 2007, file photo. Record company EMI Group PLC said it planned to unveil "an exciting new digital offering" with computer company Apple Inc. on Monday, April 2, 2007, raising expectations that The Beatles' music catalog is about to be made available through Apple's iTunes online music store. (AP Photo/Paul Sakuma)

LONDON -- Record company EMI Group PLC said Sunday it planned to unveil "an exciting new digital offering" with computer company Apple Inc., raising expectations that The Beatles' music catalog is about to be made available through Apple's iTunes online music store.

EMI said it would hold a news conference Monday at its London headquarters with its chief executive, Eric Nicoli, and Apple boss Steve Jobs "and a special live performance."

The company gave no further details.

EMI has been The Beatles' record label since the early 1960s.

The Beatles have so far been the most prominent holdout from iTunes and other online music services, and Apple's overtures to put the music online were stymied by a long-running trademark dispute with The Beatles' commercial guardian, Apple Corps. Ltd.

In February, Apple Inc. and Apple Corps resolved their legal feud over use of the apple logo and name, paving the way for an agreement for online access to the Fab Four's songs.

Apple Corps was founded by the Fab Four in 1968 and is still owned by Paul McCartney, Ringo Starr, the widow of John Lennon and the estate of George Harrison.

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WSJ story:

online.wsj.com/article/SB117547255583356319.html

EMI to Sell Music Without Anticopying Software
Online-Strategy Shift
Breaks With Industry
On Combating Piracy
By ETHAN SMITH and NICK WINGFIELD
April 1, 2007 11:42 p.m.; Page B5

In a major break with the music industry's longstanding antipiracy strategy, EMI Group PLC is set to announce today that it plans to sell significant amounts of its catalog without anticopying software, according to people familiar with the matter.

The London music company is to make its announcement at a London news conference featuring Apple Inc. Chief Executive Steve Jobs. EMI is to sell songs without the software -- known as digital rights management -- through Apple's iTunes Store and possibly through other online outlets.

DRM has been a contentious issue in online music sales. Record companies have insisted that digital retailers employ the software to prevent rampant copying. But because the DRM used by Apple is proprietary and doesn't work with services or devices made by competitors, it has had the additional consequence of locking owners of its popular iPod music players into buying the most popular mainstream music from the iTunes store, and not from its competitors.

Record companies have blamed this lock-in for limiting digital-music sales, which account for around 15% of all recorded-music sales in the U.S.

EMI's move comes after months of private discussions and public advocacy by Internet and technology-industry executives, including Mr. Jobs, aimed at encouraging the music industry to change its approach to licensing music for sale online. In February, Mr. Jobs took the unusual step of posting an 1,800-word essay on Apple's Web site urging major recording companies to consider dropping their insistence that music be sold over the Internet with DRM software.

Mr. Jobs contended that DRM software has been ineffective at solving digital piracy of music. That is in large part, he argued, because the vast majority of music is sold today on CDs, which generally don't contain copy protection, making them easily sharable over the Internet through file-sharing technologies. Although Mr. Jobs wasn't the first to suggest such a change for the music industry, his essay spurred a vigorous debate throughout the technology and entertainment industries. Also fueling the discussion recently has been a steepening drop in CD sales, which has forced the music industry to try to accelerate its digital future.

Privately, most labels rejected the idea out of hand, but EMI, the world's third-largest music company by sales after Universal Music Group and Sony BMG Music Entertainment, already was quietly exploring dropping DRM. EMI has struggled to overcome poor results and a laggard digital strategy, potentially contributing to its willingness to take a bold stance on DRM.

EMI temporarily shelved plans to drop DRM after various iTunes competitors declined to guarantee significant "risk insurance" payments designed to offset potential losses from the move. It is unclear whether Apple has guaranteed any such fee.

EMI's decision, if other major recording companies follow it, also may lessen increasing political pressure on Apple by consumer-rights organizations in several European countries, including Norway, that want Apple to make its digital music products, iTunes and the iPod, work with songs and hardware from other companies.

EMI competitors have been divided on the DRM debate. Warner Music Group Corp. has been opposed to the idea of removing DRM from its offerings, arguing that the technology will be increasingly important once digital sales eclipse CD sales. Vivendi SA's Universal Music Group and Sony BMG Music Entertainment, a joint venture of Sony Corp. and Bertelsmann AG, on the other hand, have conducted experiments. Neither company has moved as aggressively as EMI, though.